King County Single Family Median Price Hits New Record at Half a Million Dollars

June market stats were published by the NWMLS today. Before we get into our monthly stats, here’s a quick look at their press release.

Home sales sizzling around Western Washington, with volumes reaching 10-year high

Temperatures around Western Washington were not the only thing sizzling during June. Northwest Multiple Listing Service members reported 11,453 pending sales last month, the highest volume since August 2005 when members notched 11,546 mutually accepted offers. Last month also marked the fourth consecutive month of 11,000-plus pending transactions.

MLS members credit first-time buyers, an influx of relocating workers, and escalating rents for part of the surge.

“First time buyers are returning to the market, but cautiously and with more knowledge based on market values and trends,” said George Moorhead, designated broker and owner at Bentley Properties in Bothell.

“Educated buyers today are no longer just dipping their toes in the water. They are diving right in,” reported Mike Gain, CEO and president of Berkshire Hathaway HomeServices Northwest Real Estate. Gain, a past chairman of the Northwest MLS board, said in his 38 years in the industry he’s experienced “good years, bad years and everything in between,” but he’s never seen a market as complex as the current one. “It’s been challenging for everyone involved in a real estate transaction, whether buyer, seller or agent.”

Gain and many of his colleagues bemoan the lack of listings. “The only real problem we are experiencing today is the lack of inventory,” he said.

Home salespeople are no longer attempting to hide how giddy they are that prices are surging once again. They’re in all-out party mode. We’ll see how long the party lasts this time.

CAUTION

NWMLS monthly reports include an undisclosed and varying number of
sales from previous months in their pending and closed sales statistics.

Here’s your King County SFH summary, with the arrows to show whether the year-over-year direction of each indicator is favorable or unfavorable news for buyers and sellers (green = favorable, red = unfavorable):

June 2015 Number MOM YOY Buyers Sellers
Active Listings 3,418 +4.2% -23.2%
Closed Sales 2,904 +8.2% +17.3%
SAAS (?) 1.18 -2.6% -16.8%
Pending Sales 3,321 -3.7% +4.6%
Months of Supply 1.18 -3.7% -34.5%
Median Price* $500,000 +4.0% +10.3%

Feel free to download the updated Seattle Bubble Spreadsheet (Excel 2003 format), but keep in mind the caution above.

Summary: Everything still sucks for home buyers. Big time.

Here’s your closed sales yearly comparison chart:

King County SFH Closed Sales

Closed sales rose 8 percent from May to June. Last year they rose 6 percent over the same period. Closed sales volume in May was at its highest level since August 2006. Only six months since January 1993 have ever seen 3,000 or more closed sales of single-family homes in King County.

Here’s the graph of inventory with each year overlaid on the same chart.

King County SFH Inventory

Inventory inched up again slightly May to June, but yet again turned in the lowest ever recorded level for the time of year. Year-over-year inventory is still down double digits, with the largest decrease since May 2013.

Here’s the supply/demand YOY graph. “Demand” in this chart is represented by closed sales, which have had a consistent definition throughout the decade (unlike pending sales from NWMLS).

King County Supply vs Demand % Change YOY

Everything in this chart is moving in sellers’ favor.

Here’s the median home price YOY change graph:

King County SFH YOY Price Change

Back into double-digit territory.

And lastly, here is the chart comparing King County SFH prices each month for every year back to 1994 (not adjusted for inflation).

King County SFH Prices

The median home price shot up in June to a new all-time high (not adjusted for inflation).

June 2015: $500,000
July 2007: $481,000 (previous high)

Here’s this month’s article from the Seattle Times: Median price for single-family homes pushes past $500,000 in King County

Check back tomorrow for the full reporting roundup.

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About The Tim

Tim Ellis is the founder of Seattle Bubble. His background in engineering and computer / internet technology, a fondness of data-based analysis of problems, and an addiction to spreadsheets all influence his perspective on the Seattle-area real estate market.

58 comments:

  1. 1

    The price is bigger news for sellers than agents. Agents care more about the demand (number of buyers and potential buyers) and inventory.

  2. 2
    Erik says:

    Great job on the data Tim.

    It’s time for us potential sellers to put a big hurt on future buyers. I guess little jimmy is headed to community college and big Erik is headed to the pacific islands.

    Woohoo!!!

  3. 3
    Mike says:

    RE: Kary L. Krismer @ 1 – But on the other hand this rise in prices makes a lot of previously un-saleable properties with no equity saleable.

  4. 4

    RE: Mike @ 3 – I’m not sure that’s “the other hand.” I said it was bigger news for sellers. ;-)

    But it’s not just about equity. Have a house in a poor location (busy road) or with certain less desirable features (aluminum wiring) or even defects, and it will be easier to sell, sometimes with little in the way of a discount. The thing is, if you’re a buyer you don’t want to get desperate and settle less than what you really want Let someone else do that.

  5. 5
    redmondjp says:

    RE: Kary L. Krismer @ 4 – Exactly. Houses with unfixable defects (ie, in 100-year floodplain) are selling right now for as much as similar houses without those defects. That will not be the case in a buyer’s market.

    In other neighborhood news, on the four lot short-plat behind my house now being built by Quadrant, the prices have been raised again! Last summer at this time, their website stated prices from the low 900s. That then changed to the mid-900s early this year, and then to the high-900s in the late spring.

    Now?

    Prices STARTING in the low $1Ms.

    So prices have increased by $100K in the past year.

    And they have only started on the first of the four houses (are leveling the clay now for the remaining three lots). So we have officially exceeded peak prices of Housing Bubble 1.0, at least in my neighborhood.

  6. 6
    Blurtman says:

    We’re all going to be rich, rich, rich!!! What could possibly go wrong?

  7. 7

    Ahh the wealthy vs. the high income earners who don’t yet have a down payment.

    It’s a squeeze and if anyone has any evidence to prove manipulation — one email, one fax, one letter — it will be the biggest story of the year. I’ve seen squeezes in other instruments and in real estate around the Olympics, and FIFA. The international community is interested when there is undersupply, it creates a unique opportunity for extortion. The thing is, real estate analysts and such don’t have the same abilities to sniff out squeezes that equities traders do, they’ll get bit and bit hard.

    Pigs get fed — hogs get slaughtered and right now the world’s wealthy are starting to behave like hogs. Greece. Need I say more?

  8. 8
    Cornix says:

    Unwelcome news to couple my 20% rent increase. Onward and upward I suppose.

  9. 9
    Rudolfo says:

    RE: redmondjp @ 5
    An 11% YOY increase sounds about right.

  10. 10

    By Irrational Exhuberance @ 7:

    It’s a squeeze and if anyone has any evidence to prove manipulation — one email, one fax, one letter — it will be the biggest story of the year. I’ve seen squeezes in other instruments and in real estate around the Olympics, and FIFA.

    Yes, there’s a huge chain email where owners of properties are conspiring not to put their houses on the market. I’ve gotten it at least 2 or 3 times! /s

  11. 11
    Erik says:

    RE: Cornix @ 8
    We are going to squeeze the corn right out of you cornix. You can sleep on my couch for $2000/mo. Hooray!!!

  12. 12
    Cornix says:

    By Erik @ 11:

    RE: Cornix @ 8
    We are going to squeeze the corn right out of you cornix. You can sleep on my couch for $2000/mo. Hooray!!!

    This is like the backyard pup tent in San Francisco. Hooboy!

  13. 13
    Erik says:

    RE: Blurtman @ 6
    All of us probably expect another crash. It will probably be a while though. My guess is 9 years. We are very likely to be good for the next 2 years.

    I got off the east side for 2 reasons. (1) I got really sick of software people. (2) prices aren’t as stable on the east side. When those software companies leave, housing prices are screwed. Expedia is already moving to Seattle. Who’s next?

  14. 14
    whatsmyname says:

    Tim, Rising prices are favorable for buyers. Look what they’ve done for the people who have bought since 2011. Surely an appreciating asset is more desirable than “catching a falling knife”.

  15. 15
    Mike says:

    By whatsmyname @ 14:

    Tim, Rising prices are favorable for buyers. Look what they’ve done for the people who have bought since 2011. Surely an appreciating asset is more desirable than “catching a falling knife”.

    Owners, not buyers. I’d be kidding myself if I thought whomever buys my craphole for 50% more than I paid for it 3 years ago was benefiting from the hundreds of thousands in equity I’d stand to pocket.

  16. 16
    whatsmyname says:

    RE: Mike @ 15 – Isn’t a buyer by definition someone who is becoming an owner? Is there any other reason to be a buyer? Would you become a buyer for what happens at the closing table with no consideration for what happens afterward? Would you like to catch a falling knife? Do you think that would be a good move for the person who buys your craphole?

  17. 17

    RE: whatsmyname @ 16

    This is why for most of history everyone only represented sellers and sellers’ interests. It’s impossible to accommodate both the best interests of buyers and sellers at the same time, as a market and industry as a whole. The theory was what is good for sellers will eventually be good for buyers…when they become sellers. We can’t promote an up and down market at the same time.

    It didn’t seem fair, but it made a helluvalot more sense and had a lot less deceit at its core than screaming “it’s a great time to buy” and “it’s a great time to sell” alternately throughout the day, depending on who one is speaking with.

  18. 18
    Cap''n says:

    RE: whatsmyname @ 16

    You miss the point. After the 30-50 percent appreciation desirable close-in Seattle neighborhoods have seen, the buyer is not grabbing a falling knife or a helium balloon just leaving the child’s hand. Mike is right. Buyers these days are taking a huge gamble. Unsustainable price increases, coming in at all time high (unadjusted for inflation) prices, and hoping that Seattle can only hold or increase in value because it’s not yet SF, VAN, NYC, etc. Arguing the upside for buyers in the current market is a tough sell indeed. On the other hand, as a debt servant that is renting from the bank since 2012, I agree-buy now or be priced out forever!

  19. 19
    whatsmyname says:

    RE: Cap''n @ 18
    No Cap’n; you missed the boat. I am talking about straight use of the metric. You are trying to smother the general with the specific, i.e. market timing issues which are wholly a side issue. But in fact, this same metric gave the same reading three years ago when Mike says he bought his house. The June numbers for 2012 indicated a 10%+ price increase. Was that an unfavorable time to buy a house? Mike thinks there’s been a 50% price increase, you say 30-50, and certainly inventory has not since equaled those numbers.

    The question was asked – but not answered. Would you consider falling prices a favorable sign for buying?

  20. 20
    Mike says:

    By whatsmyname @ 16:

    RE: Mike @ 15 – Isn’t a buyer by definition someone who is becoming an owner? Is there any other reason to be a buyer? Would you become a buyer for what happens at the closing table with no consideration for what happens afterward? Would you like to catch a falling knife? Do you think that would be a good move for the person who buys your craphole?

    It’s irrelevant to me whether it’s a good move for the buyer, unless all potential buyers are pricing that expectation into their offer. Most residential real estate in the US doesn’t have a huge appreciation component priced in or expected at time of purchase. Why do people buy houses in the Midwest? Maybe they want to own a home, maybe they can do so for less than the price, or expected price of rent? Who knows. Buying a house because you expect the value to increase is a coastal phenomenon, and not all coastal areas benefit from it in an even way. Past appreciation doesn’t necessarily benefit either the current owner or future buyer. It’s not that simple.

    As for falling or rising prices being a buy signal, it depends on market timing. You can’t take that out of the equation in a market like this because there has never been a steady predictable rise in prices in anyone’s lifetime. Over time it has averaged out to something positive, but whatever prices are doing today is, at best, and indication of where we may be at during the current cycle.

  21. 21
    whatsmyname says:

    By Mike @ 20:

    whatever prices are doing today is, at best, and indication of where we may be at during the current cycle.

    So we agree that rising prices are not a de facto negative for buyers. I can live with that.

  22. 22

    So if you don’t buy now — you never will be able to later. So this immediately implies that if you do buy a house now, nobody will be able to buy it later. You know what happens in that situation?

    And yes there most likely is manipulation, not by the buyers and sellers, the market makers do it – just like yes there was a boogeyman listening to your phone calls (NSA), just like yes — there was a thief jacking up electricity prices in California (Enron), just like yes… I could go on and on and still you’d dive your head into the sand and beat the drum because well — there is bias as a home owner, but as a homeowner myself — this market in Seattle is too attractive not to attract criminal activity.

    Now that China markets are collapsing — you bet those guys want any gain they can get to hedge their bets.

    What I am more concerned about is my renting neighbors all over the entire city that might just get fed up. What I am more concerned about is rent control sticking it to anyone trying to rent the house they just invested in to make a fortune on in unregulated rental increases and the foreclosure a that could bring.

    What I am more concerned about is a reasonable place to live instead of worshipping ever increasing numbers that are being hyped as more and more .com sites, apps, government and the media pump up valuations in real estate.

  23. 23

    By Ardell DellaLoggia @ 17:

    RE: whatsmyname @ 16

    This is why for most of history everyone only represented sellers and sellers’ interests. It’s impossible to accommodate both the best interests of buyers and sellers at the same time, as a market and industry as a whole. The theory was what is good for sellers will eventually be good for buyers…when they become sellers..

    I’m not sure what the rational was for the old system, other than the nonsense of following the money only part of the way. But it’s not impossible for different agents to represent the interests of buyers and sellers at the same time, although this particular market makes it much harder to represent the interests of buyers in an a very aggressive manner in many instances. Back in 2010 it was hard to represent sellers in a very aggressive manner in many instances. Same licensing system, different result.

  24. 24
    boater says:

    RE: Irrational Exhuberance @ 22

    In each case where you list a boogie man (NSA,Enron) there was a single choke point that could be manipulated. With the NSA its the phone companies server/networking rooms and in Enron it was the energy exchange with limited participants.

    To have that happen in housing you’d need to identify the choke points. The interest rate is one point but with many all cash buyers that seems out as a likely source. Fannie May and Freddie Mac are another but they are not making it easy to lend like they did in 2007 and tend to be the boogie man banks fear so their out. Sellers and buyers are not organised in any group way so they seem out.

    Where’s the choke point that’s being manipulated?

  25. 25

    By boater @ 24:

    RE: Irrational Exhuberance @ 22

    In each case where you list a boogie man (NSA,Enron) there was a single choke point that could be manipulated. With the NSA its the phone companies server/networking rooms and in Enron it was the energy exchange with limited participants.

    With Enron it wasn’t even Enron. It was Democrats and Republicans in California setting up an incredible stupid system with a unanimous or nearly unanimous vote. Enron, involved in another scandal, was just a very easy scapegoat for the politicians to point to which was widely accepted by the incredibly ignorant (e.g. the press).

    But as to your specific point, it wasn’t only limited participants. In their system there was only one buyer and that buyer published the information on how much power they would need to buy each hour at least one day out and estimated which hours there would be shortages. Can you imagine if there was only one mutual fund buying stocks and they published the data on what they would be buying the next day?

    This is basically what they had back then, only the orange line was much closer or even below the other line.

    http://www.caiso.com/Pages/TodaysOutlook.aspx

  26. 26
    ARDELL says:

    RE: boater @ 24

    With NYSE trading halted today, everyone’s looking for a boogie man.

  27. 27
    jon says:

    The plunge in Chinese stocks is going to dry up money flowing to the Seattle housing market, but now the freezing of stocks for six months of major shareholders is going to make executives there work harder to find ways of getting their money out of the country before the government starts giving Greek-style “haircuts.”

    http://finance.yahoo.com/news/china-bans-stock-sales-major-123555540.html

  28. 28
    Shoeguy says:

    “First time buyers are returning to the market, but cautiously and with more knowledge based on market values and trends,” said George Moorhead, designated broker and owner at Bentley Properties in Bothell.

    Are they? How is Mortgage Application volume? Still at 1995 levels?

    How’s that first time buyer percentage? Still half of what it should be?

    All is well in Housing Bubble 2.0.

  29. 29
    David B. says:

    RE: Kary L. Krismer @ 25 – “With Enron it wasn’t even Enron. It was Democrats and Republicans in California setting up an incredible stupid system with a unanimous or nearly unanimous vote. Enron, involved in another scandal, was just a very easy scapegoat for the politicians to point to which was widely accepted by the incredibly ignorant (e.g. the press).”

    Not so fast. Yes, California lawmakers passed a stupid deregulation bill. But it didn’t happen in a vacuum. Energy companies, and in particular Enron, lobbied aggressively for it:

    http://www.publicintegrity.org/2003/01/06/3161/enrons-deregulation-fight

  30. 30

    RE: David B. @ 29 – That may be true–probably the result of lots of dollars contributed to campaigns. Whenever Democrats and Republicans agree on something in large numbers, it’s usually a bad idea.

    But the Enron spin made zero sense. If they were the cause of California drying up it’s $20B reserve fund, two large utilities spending so much money that they ended up in bankruptcy and cities like Seattle spending so much money that it would probably take a decade to recover from, Enron would not have ended up in bankruptcy.

  31. 31
    David B. says:

    RE: Kary L. Krismer @ 30 – I’m sorry, that most recent post of yours makes no sense to me. I was commenting on electricity deregulation in California. Nobody mentioned California state budgeting in this thread until you just brought it up.

    Enron is responsible for laws they aggressively lobbied for. Not solely responsible, of course (lawmakers could and should have rebuffed Enron), but trying to paint them out of the picture entirely is disingenuous.

  32. 32
    greg says:

    RE: Erik @ 13

    meanwhile Google continues to expand on the eastside along with dozens of smaller players. MSFT has a smaller percentage of software employees on the eastside than at any other time in the last 30 years.

    (granted they are still massive and the only company large enough to truly impact house prices long term)

  33. 33
    greg says:

    RE: Irrational Exhuberance @ 22

    “manipulation”

    Yes very much so, but it is open and transparent.

    The US federal government has been completely upfront about its manipulation of markets in order to get through the whole housing and stock implosions .

    We currently have a policy designed to inflate the dollar value of assets in order to reduce the burden of debt and to force consumers/investors to put monies to work. There is nothing hidden about this, it is the US policy for the last 5 years or so.

    The result is to force idle monies to work and to blow up the dollar value of all asset classes as far as they think they can get away with. Seattle and number of other areas are the bleeding edge, they face serious risk due to a policy that is focused on lifting the weaker housing markets and ensuring those markets grow out the debt.
    I have seen this before, strong markets that would normally have the brakes applied, are left to run out of control and are sacrificed for the greater good of the economy .

    Seattle should have had the brakes applied already, but instead the US federal policy is allowing our market to over heat. there is little we can do locally without either opening the supply floodgates through rezoning or applying draconian taxation, either of which would land the political leadership of the day in very hot water.

    so manipulation……. hell ya, but what are we able to do about it, other than embrace it and try to ride the wave without getting dashed on the rocks…

  34. 34

    RE: David B. @ 31 – California poured through $20B in reserves trying to keep retail electricity prices low. It’s directly related to the topic. And I’m not trying to paint them out of the picture entirely, but they weren’t hardly even a significant part of the problem after enactment. They were one of several entities trading electricity.

  35. 35
    Blurtman says:

    RE: greg @ 33 – What he said.

  36. 36
    Azucar says:

    By whatsmyname @ 21:

    By Mike @ 20:

    whatever prices are doing today is, at best, and indication of where we may be at during the current cycle.

    So we agree that rising prices are not a de facto negative for buyers. I can live with that.

    IMO, rising prices ARE a defacto negative for buyers who are looking to become OWNERS (someone looking for a place to live that they do not plan to sell – for example if they are buying a house in Kansas that they are planning to wither away within), but they are not a defacto negative for buyers looking to become sellers (i.e. investors). If they are looking to one day sell, then rising prices are necessary for them to one day make a profit… however, if prices have risen a lot (which they have over the past two years), there is already a lot of potential profit that they have lost… and they will continue to lose it the more prices rise until they have already BOUGHT and then have become potential SELLERS… so even for those people (BUYERS as opposed to OWNERS) rising prices, in and of themselves, ARE a negative. The only reason that rising prices might be considered a positive for someone who does not yet own is that due to momentum of the market (and the fact that the conditions which caused the prices to be rising) does not change immediately, so the currently rising prices are an indication that prices will continue to rise in the near term. However, as prices rise they change the balance of the market… so the more they rise the more likely they are to fall (or at least the more likely they are to rise less in the future in response to other factors that are driving them up, such as overall inflation and/or overall demand… which by the way is also decreased when prices rise because there are less people who are able to afford them, and rental alternatives become cheaper).

    The one big positive of rising prices, that make them a very good thing for buyers, is the bubble effect (increasing demand and more rapidly increasing prices because people are buying now on speculation or so “they won’t be priced out forever”). However, that doesn’t last forever (as many found out in 2007/2008).

  37. 37
    Erik says:

    RE: greg @ 32
    If you say so…

  38. 38
    greg says:

    RE: Erik @ 37

    it is not if I say so, it is a fact and one you can confirm by simply reviewing open positions. Google did not spend the last two years doubling the size of its Houghton campus to fill it with flowers, they are hiring non stop , high wage high skill positions. And they are not alone.

  39. 39
    Erik says:

    RE: greg @ 38
    If you say so…

  40. 40
    Erik's Step Dad says:

    Kerry thanks for derailing another otherwise interesting thread. Please put the ruler away. I feel like I represent the rest of the Bubble faithful in saying, we are willing to concede you are the biggest.

    By Kary L. Krismer @ 34:

    RE: David B. @ 31 – California poured through $20B in reserves trying to keep retail electricity prices low. It’s directly related to the topic. And I’m not trying to paint them out of the picture entirely, but they weren’t hardly even a significant part of the problem after enactment. They were one of several entities trading electricity.

  41. 41
    whatsmyname says:

    By Azucar @ 36:

    IMO, rising prices ARE a defacto negative for buyers who are looking to become OWNERS (someone looking for a place to live that they do not plan to sell – for example if they are buying a house in Kansas that they are planning to wither away within),

    I would counter that this is an extremely small subset of buyers.

    they are not a defacto negative for buyers looking to become sellers (i.e. investors). If they are looking to one day sell, then rising prices are necessary for them to one day make a profit…

    Almost all buyers expect to sell someday. You see, we are already in agreement

    , if prices have risen a lot (which they have over the past two years), there is already a lot of potential profit that they have lost… and they will continue to lose it the more prices rise until they have already BOUGHT then have become potential SELLERS…

    Buyers didn’t lose that profit. It was people who didn’t buy that lost that profit. I think there is a lot of confusion about the word buyers on this blog.

    so the currently rising prices are an indication that prices will continue to rise in the near term. However, as prices rise they change the balance of the market…

    This is your real point. It does contradict my initial statement, but it is in agreement with the statement to which you are responding.

    one big positive of rising prices, that make them a very good thing for buyers, is the bubble effect (increasing demand and more rapidly increasing prices because people are buying now on speculation or so “they won’t be priced out forever”). However, that doesn’t last forever (as many found out in 2007/2008).

    “Rising prices” are not the same thing as a speculative frenzy. All you need do is to review your pay history, and this will become clear.

  42. 42
    David B. says:

    RE: Kary L. Krismer @ 34 – “they [Enron] weren’t hardly even a significant part of the problem after enactment”

    You have any evidence (links to trustworthy sources are fine) to support this rather remarkable assertion?

  43. 43
    Erik says:

    RE: Erik’s Step Dad @ 40
    Kary got beat down by mr. Peppers in a previous post. Mr. Peppers exposed Kary. That was a fight Kary probably shouldn’t have taken.

    The point is that Kary is more flustered and angry than ever. If you haven’t read it, you should. One of my favorite battles ever. Very educational as well.

  44. 44

    By Erik @ 43:

    RE: Erik’s Step Dad @ 40
    Kary got beat down by mr. Peppers in a previous post. Mr. Peppers exposed Kary. That was a fight Kary probably shouldn’t have taken.

    Erik, are you really that dense? Ray doesn’t know squat about me, but just made up a bunch of falsehoods. In contrast, I totally destroyed Ray. He bought a flip at the wrong time, failed to sell it due to his own incompetence as an agent (much of which I haven’t disclosed), suffered huge tax liabilities and still faces the potential for large losses on that property.

    One reason for bringing all that up was to prevent people from falling for whatever scam Ray is perpetuating with his BS. I am just guessing as to how he’s profiting by suckering in low intelligence/low educated people who believe him, but his activity goes well beyond just trying to deny he made a mistake. Ray is seemingly rather obviously a con man. Why else would he have been promoting his scheme in October 2010 when he almost certainly had to know of the tax consequences of the lien filed in December 2010?

    If you can’t see that you are a potential victim, not just of Ray, but of any other con man who happens to be trolling SB. You might as well give your money to charity, because at least then you’ll get a tax deduction.

  45. 45

    By David B. @ 42:

    RE: Kary L. Krismer @ 34 – “they [Enron] weren’t hardly even a significant part of the problem after enactment”

    You have any evidence (links to trustworthy sources are fine) to support this rather remarkable assertion?

    The San Jose Mercury News had the best coverage of the crisis, but it’s far too old to be able to look it up.

    But what’s your explanation for Enron’s bankruptcy if they were making even half the profit off the energy crisis? How could they become insolvent as a result of their other activities if they were making so much money off of California?

    What’s sad is it technically wasn’t the poorly designed degregulation system that caused the problem. It was the refusal to raise retail prices. As soon as they announced the changes the blackouts stopped because people followed the laws of economics and quit wasting so much power. They didn’t even wait for the first bills to come in. Simple fix, stupid politicians, as is typical for California.

  46. 46

    By greg @ 38:

    RE: Erik @ 37

    it is not if I say so, it is a fact and one you can confirm by simply reviewing open positions. Google did not spend the last two years doubling the size of its Houghton campus to fill it with flowers, they are hiring non stop , high wage high skill positions. And they are not alone.

    I agree with you, but the question would be what will happen if the stock market tanks again? Many of the smaller players will likely be in trouble and start laying people off, like what happened before.

  47. 47

    RE: Erik’s Step Dad @ 40 – The nut doesn’t fall far from the tree.

  48. 48
    whatsmyname says:

    RE: Shoeguy @ 28

    http://themortgagereports.com/16963/mortgage-rates-refinance-ellie-mae-purchase

    Given that refinances vary from more than 70% to less than 40% of new mortgages, why on earth would anyone use mortgage apps as a proxy for sales? Especially when sales numbers are readily available?

  49. 49
    David B. says:

    RE: Kary L. Krismer @ 45 – So you can’t produce evidence to back up your assertion that Enron was a bit player in the whole thing. Noted.

    So far as Enron’s bankruptcy, that’s not pertinent. I never claimed Enron never went bankrupt.

  50. 50

    By David B. @ 49:

    RE: Kary L. Krismer @ 45 – So far as Enron’s bankruptcy, that’s not pertinent. I never claimed Enron never went bankrupt.

    You’re missing the point entirely. If Enron was being enriched by energy trading in California to the extent claimed, they wouldn’t have had to file bankruptcy! As I’ve said in the past, for that to have occurred the rest of their business would have had to involve shredding $100 bills.

    They were just a scapegoat, and the sheeple fell for it because that’s what the politicians said and most the news media reported.

  51. 51
    Shoeguy says:

    By Blurtman @ 35:

    RE: greg @ 33 – What he said.

    Yea, ditto.

    It’s rare to see posters that understand that Housing Bubble 2.0 is a symptom of a larger problem and not the problem itself.

  52. 52
    Cornix says:

    By greg @ 33:

    RE: Irrational Exhuberance @ 22

    “manipulation”

    Pretty much.

  53. 53
    Azucar says:

    RE: whatsmyname @ 41

    I would counter that this is an extremely small subset of buyers.

    But we both agree that they are there… so a buyer is not necessarily an “investor” or someone who is looking to sell someday. They may have no family and just be looking to live out the rest of their days in the house… and rising prices will cause their property taxes to rise over the years. As such, for some BUYERS rising prices ARE a defacto negative. So, you need to qualify the definition of buyers to specify that you are talking about the ones that are going to sell some day… but then it’s better to call them INVESTORS because that is the characteristic that makes the rising prices not a negative.

    Buyers didn’t lose that profit. It was people who didn’t buy that lost that profit. I think there is a lot of confusion about the word buyers on this blog.

    No people who did not are not affected at all, and they are not buyers. I agree that there seems to be confusion about the word buyers on this blog, but it seems to me that you are the one making it confusing. As far as I know, the definition of a BUYER is someone who gives or commits money to attain ownership of something. There is no requirement that they have an intention to one day be a seller in order to qualify them as being a buyer. Assuming giving less money for a given item is a good thing for a buyer, then it seems clear to me that rising prices are not a good thing for a buyer – they only make it so the buyer needs to be in a hurry in order to minimize the money they give for a given item. Reducing the time that someone has available to do anything seems, to me, to be a negative in most cases. I agree that once they become OWNERS, if they are one day going to be SELLERS, then rising prices might be a good thing… however, if they are going to sell in order to move into a “better” (aka more expensive) place – which most do because hey, you gotta have someplace to live – then rising prices probably are not a good thing because the new place is going to be more expensive, too).

    “Rising prices” are not the same thing as a speculative frenzy. All you need do is to review your pay history, and this will become clear.

    True, but in the case that I brought up… someone buying with no intention of later selling, but only to have somewhere to live, any rising prices are a bad thing because they will likely cause property taxes to increase. There being a “speculative frenzy” makes things even worse, but if there’s no intention to ever take the capital back out of the house (either by selling or by taking a HELOC), there is a down side to rising prices (increased taxes) and limited up side.

  54. 54
    David B. says:

    RE: Kary L. Krismer @ 50 – “You’re missing the point entirely. If Enron was being enriched by energy trading in California to the extent claimed, they wouldn’t have had to file bankruptcy!”

    Unless Enron was being run incompetently and the profits from manipulating the energy markets were either inconsistent and/or insufficient to make up for losses in other aspects of their business.

  55. 55

    RE: David B. @ 54 – We’re talking about such larges sums of money over such a short period of time, then if that’s the case by definition Enron would not have been a major player.

    Why are you having such a hard time believing the public was mislead by politicians and the press? I’m not trying to say Enron was a good company. Only that it was an easy scapegoat because of it’s other activities.

  56. 56
    whatsmyname says:

    By Azucar @ 53:

    RE: whatsmyname @ 41

    .. As such, for some BUYERS rising prices ARE a defacto negative. So, you need to qualify the definition of buyers to specify that you are talking about the ones that are going to sell some day… but then it’s better to call them INVESTORS because that is the characteristic that makes the rising prices not a negative.

    No. the purpose was to make a general statement about buyers. Most buyers by far intend to sell someday. It does not make sense to reserve the term BUYERS for the minority of buyers you describe, and rename most buyers for something that is not necessarily foremost on their mind. One might just as well call the majority BUYERS your subgroup HOLDERS. Logically, if we know that a metric of rising prices is good for some and bad for others; the factually correct statement is that that rising prices are not a de facto negative for buyers (or de facto positive for buyers). The choice in which way we frame this is most honestly done by what would be typical for most buyers.

    No people who did not (buy) are not affected at all, and they are not buyers.

    That is precisely my point. All through these last 3 years there were people who bought. These were the buyers. The did not “lose” the subsequent profits. People who spend years complaining about the market, but not buying anything, are not buyers.

    giving less money for a given item is a good thing for a buyer, then it seems clear to me that rising prices are not a good thing for a buyer

    Depends on the item. A declining priced, short term consumable may be a good thing for a buyer. A declining price long term capital asset may suggest other things. Is it good for a buyer to be stuck in a declining neighborhood or transportation options? Is it good for a buyer to even slowly head underwater on their mortgage? There is more to the favorability of a long term purchase than short term bargaining power.

    “Rising prices” are not the same thing as a speculative frenzy. All you need do is to review your pay history, and this will become clear.

    True , but

    No need to go further. (kidding)

    the case that I brought up… someone buying with no intention of later selling, but only to have somewhere to live, any rising prices are a bad thing because they will likely cause property taxes to increase. There being a “speculative frenzy” makes things even worse, but if there’s no intention to ever take the capital back out of the house (either by selling or by taking a HELOC), there is a down side to rising prices (increased taxes) and limited up side.

    Are you that someone? Did you buy when prices were going down?

    To the degree that rising prices reflect a changed world you don’t want, you are corrrect. You can find stasis, or near stasis, but don’t expect to find it in an active regional hub economy. It’s not realistic. You can’t have it both ways. Prices are going up because the desirability is increasing…because there are more participants with more money. If one is fixed income, and doesn’t expect to keep up with property taxes, and won’t move ever; they are looking at too expensive property or in the wrong area. Conversely, they can move down now, or take their eventual profits and move down later.

  57. 57
    Wright says:

    If given an option to have the current market conditions or the option to have a real estate market with depressed prices and an over-supply of inventory, I would have to choose the current market conditions in King County.

    Growth is more uplifting and inspiring while stagnation gives one a more depressing feeling.

    Obviously, we would all love a perfect medium. For some reason, I’ve never really seen or experienced a happy medium.

    If you were given the option to choose between the choices in my little scenario, which would you choose?

  58. 58

    By Wright @ 57:

    If you were given the option to choose between the choices in my little scenario, which would you choose?

    As an agent I would choose the former over the current market, because you can do more for buyer clients and it takes some talent to successfully list a property. I don’t find this market that enjoyable.

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